Maine Tax Incidence StudyA Distributional Analysis of Maine’s State & Local Tax System

Michael J. Allen, Ph.D.Economic Research Division

Maine Revenue Services

Presentation to Joint Standing Committee on Taxation

August 15, 2011

Outline of Presentation

• Background• Tax Year 2009

– Tax Burden 1996-2009– State & Local System

• Sales & Use Tax• Excise Taxes• Individual Income Tax• Property Tax

• Tax Year 2013

36 MRSA, Section 200

• Estimate of state and local tax burden on Maine residents

• Distribution of tax burden• Analysis of progressivity of tax system• Analysis of trends

Estimated State & Local Tax Burden

Maine State & Local Effective Tax Rates 1996-2009

7.29% 7.33% 7.32% 7.22% 7.10% 6.86% 6.95% 7.04% 7.13% 6.99% 6.97% 6.87%6.72% 6.51%

4.55% 4.39% 4.13% 4.00% 3.90%4.31% 4.54% 4.62% 4.64% 4.29% 4.27% 4.39% 4.65% 4.86%

11.76%11.66%11.49%11.17%11.00%11.22%

11.45%11.72%11.84%11.28% 11.24% 11.26% 11.37% 11.37%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009P

Calendar Year

Effe

ctiv

e Ta

x R

ate State

Local

Total

Maine’s State Level Tax Base is Volatile

• Volatility of Maine’s tax system is often discussed, but not quantified or compared to other states.

• Dye & McGuire (National Tax Journal, 1998) – Estimate a measure of the sensitivity of each state’s revenue system to the business cycle. Assume constant tax law

Findings: Maine had the 11th most volatile tax base (individual income and sales) between 1976 and 1995 cyclical elasticity of estimated individual income tax = 1.18 (tied for 19th); cyclical elasticity of estimated sales tax = 1.23 (tied for 9th); combined elasticity of 1.2

Table 2Maine State and Local Tax Collections for Calendar Year 2009 Liability

(Millions of Dollars)

State Local Total

Included Included Included Sales & Use Tax $945 Gross Property Taxes $2,071 Individual Income Tax $1,266 Motor Vehicle Excise Tax $191 Corporate Income Tax $149 Watercraft Excise Tax $2 Cigarette, Tobacco & Alcohol Taxes $161 Homestead Exemption ($57) Public Utilities Tax $19 Circuit Breaker Refunds ($43) Insurance Companies Tax $82 BETR/BETE Refunds ($71) Estate Tax $30 State Property Taxes /1 26.34$ Motor Fuels Excise Taxes $234

Total $2,914 Total $2,093 $5,007

Omitted Omitted Omitted Railroad Company Tax $1 Sardine Tax $0 Mahogany Quahog Tax $0 Milk Handling & Stabilization Tax $0 Blueberry Tax $1 Potato Tax $1 Recycling Assistance Fee $1 Pari-mutuel Revenue $5

Total $9 Total $0 $9

Total Tax Collections $2,923 Total Tax Collections $2,093 $5,016

1/ Includes Unorganized Territory Taxes, Real Estate Transfer Taxes, and Commercial Forestry Excise Tax.

Table 3 State and Local Tax Collections for CY09 Liability by Type of Tax and Taxpayer Category

(Millions of Dollars)

Collections Percentage by Taxpayer Category Tax Category Percentage Individuals

Total Distribution Resident Nonresident Businesses Total

Taxes on Income Individual Income Tax $1,266.4 25.3% 94.4% 5.6% 0.0% 100.0% Corporate Income Tax /1 $149.3 3.0% 0.0% 0.0% 100.0% 100.0%

Total Income Taxes $1,415.7 28.3% 84.5% 5.0% 10.5% 100.0%

Taxes on Consumption Sales & Use Tax $944.6 18.9% 61.4% 11.3% 27.3% 100.0% Cig., Tob. & Alcohol Excise $161.0 3.2% 91.3% 8.2% 0.5% 100.0% Insurance Companies Tax /2 $82.3 1.6% 0.0% 0.0% 100.0% 100.0% Motor Fuels Excise Taxes $234.4 4.7% 51.7% 8.6% 39.7% 100.0%

Total Consumption Taxes $1,422.3 28.4% 59.6% 9.8% 30.5% 100.0%

Taxes on Wealth Estate Tax $30.4 0.6% 79.6% 20.4% 0.0% 100.0%

Taxes on Property Local Homeowners (gross) $1,532.2 30.6% 84.6% 15.4% 0.0% 100.0% Businesses (gross) $538.5 10.8% 0.0% 0.0% 100.0% 100.0% Motor Vehicle Excise Tax $190.7 3.8% 70.0% 0.0% 30.0% 100.0% Watercraft Excise Tax $2.4 0.0% 80.0% 20.0% 0.0% 100.0% Homestead Exemption ($56.9) -1.1% 100.0% 0.0% 0.0% 100.0% Circuit Breaker Refunds ($42.5) -0.8% 100.0% 0.0% 0.0% 100.0% BETR/BETE Refunds ($71.4) -1.4% 0.0% 0.0% 100.0% 100.0%

State State Property Taxes (gross) /3 $26.3 0.5% 36.4% 7.7% 55.9% 100.0% Public Utilities Tax $19.3 0.4% 0.0% 0.0% 100.0% 100.0%

Total Property Taxes $2,138.7 42.7% 62.7% 11.2% 26.1% 100.0%

Total Taxes $5,007.1 100.0% 68.1% 9.1% 22.8% 100.0%

1/ Includes Franchise Tax on Financial Institutions.2/ Includes Fire Investigation and Prevention Tax.3/ Includes Unorganized Territory Taxes, Real Estate Transfer Taxes, and Commercial Forestry Excise Tax.

Sales & Use Tax

Total Taxable Sales

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

Quarter & Calendar Year

Year

-Ove

r-Ye

ar P

erce

nt C

hang

e

Qtr. I 11.1% 10.0% 7.0% 1.0% 2.0% 3.0% 15.0% -1.2% 7.0% -2.0% -2.0% -8.9% 3.0% 2.0%

Qtr. II 7.1% 10.0% 7.0% 0.0% 5.0% 3.0% 4.0% 3.6% 1.0% 1.0% 2.2% -11.0% 3.0%

Qtr. III 7.1% 11.0% 0.0% 2.0% 5.0% 4.0% 4.0% 3.0% 2.0% 1.0% -1.0% -7.0% 1.0%

Qtr. IV 11.0% 7.0% 1.9% 4.0% -1.0% 9.0% 2.7% 1.0% -1.0% 0.0% -8.0% -3.0% 2.8%

Year 9.0% 9.0% 3.6% 2.0% 3.0% 5.0% 6.0% 2.0% 2.0% 1.0% -2.0% -7.0% 2.8%

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Maine Sales and Use Tax Paid Directly by Consumers - Tax Year 2009(Maine Residents Only)

Expanded Income Tax Liability Average Effective Decile Income Range Families $ Millions $ Millions Percent Tax Tax Rate

First & Second -$ Infinity <= $12,167 134,767 $859 $31.5 5.4% $234 3.7%Third $12,168 <= $17,711 67,387 $1,012 $21.1 3.6% $313 2.1%Fourth $17,712 <= $23,373 68,104 $1,392 $28.5 4.9% $419 2.0%Fifth $23,374 <= $30,810 66,659 $1,829 $42.2 7.3% $633 2.3%Sixth $30,811 <= $41,668 67,382 $2,377 $49.1 8.5% $729 2.1%Seventh $41,669 <= $55,471 67,385 $3,248 $62.0 10.7% $920 1.9%Eighth $55,472 <= $74,757 67,381 $4,350 $72.2 12.5% $1,072 1.7%Ninth $74,758 <= $108,724 67,383 $6,054 $81.4 14.0% $1,208 1.3%Tenth $108,724 <= $ Infinity 67,383 $14,440 $192.1 33.1% $2,850 1.3%Total Total 673,831 $35,561 $580.1 100.0% $861 1.6%Top Decile Decomposition90th to 95th $108,725 <= $145,201 33,693 $4,181 $56.6 9.8% $1,681 1.4%95th-99th $145,202 <= $323,241 26,952 $5,315 $71.6 12.4% $2,658 1.3%Top 1% $323,242 <= $ Infinity 6,738 $4,943 $63.8 11.0% $9,465 1.3%

Excise Taxes

Maine Excise Taxes Paid Directly by Consumers - Tax Year 2009 (Maine Residents Only)

Income Tax Liability /2 Average Effective Decile Income Range Families $ Millions $ Millions Percent Tax Tax Rate

First & Second -$ Infinity <= $12,167 134,767 $859.3 $30.3 11.3% $225 3.5%Third $12,168 <= $17,711 67,387 $1,012.3 $19.3 7.2% $287 1.9%Fourth $17,712 <= $23,373 68,104 $1,392.0 $24.0 8.9% $352 1.7%Fifth $23,374 <= $30,810 66,659 $1,829.3 $32.6 12.1% $489 1.8%Sixth $30,811 <= $41,668 67,382 $2,376.6 $32.8 12.2% $487 1.4%Seventh $41,669 <= $55,471 67,385 $3,248.1 $34.2 12.7% $507 1.1%Eighth $55,472 <= $74,757 67,381 $4,349.6 $28.2 10.5% $419 0.6%Ninth $74,758 <= $108,724 67,383 $6,054.5 $20.0 7.5% $297 0.3%Tenth $108,724 <= $ Infinity 67,383 $14,439.7 $46.8 17.4% $694 0.3%Total Total 673,831 $35,561.3 $268.2 100.0% $398 0.8%Top Decile Decomposition90th to 95th $108,725 <= $145,201 33,693 $4,181 $14.0 5.2% $415 0.3%95th-99th $145,202 <= $323,241 26,952 $5,315 $17.4 6.5% $644 0.3%Top 1% $323,242 <= $ Infinity 6,738 $4,943 $15.4 5.7% $2,288 0.3%

Individual Income Tax

Individual Income Tax Withholding

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Quarter & Calendar Year

Year

-Ove

r-Ye

ar P

erce

nt

Cha

nge

Qtr. I 6.2% 16.3% 10.1% 9.0% -1.9% 5.7% 6.5% 7.1% 2.7% 3.8% 4.6% -2.7% -1.7% 9.5%

Qtr. II 20.3% 6.2% 11.0% 11.1% 2.0% 3.8% 2.2% 2.0% 4.7% 5.3% 3.3% -2.8% 3.1% 1.7%

Qtr. III -2.0% 11.4% 4.0% -0.4% 8.4% 2.8% 14.1% 3.7% 5.3% 2.3% 6.5% -3.3% 8.6%

Qtr. IV 3.2% 11.8% 3.6% 8.3% 4.5% 3.2% 5.5% 3.7% 4.4% 5.5% 1.8% -0.4% 1.0%

Year 7.3% 11.2% 7.4% 7.6% 2.7% 3.9% 6.4% 4.1% 4.2% 4.4% 3.9% -2.3% 2.4% 5.4%

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Maine Individual Income Tax by Population Deciles - Tax Year 2009(Maine Residents Only)

Expanded Income Tax Liability Average Effective Decile Income Range Families $ Millions $ Millions Percent Tax Tax Rate

First & Second -$ Infinity <= $12,167 134,767 $859 $0.7 0.1% $5 0.1%Third $12,168 <= $17,711 67,387 $1,012 $3.4 0.3% $50 0.3%Fourth $17,712 <= $23,373 68,104 $1,392 $9.1 0.8% $134 0.7%Fifth $23,374 <= $30,810 66,659 $1,829 $25.5 2.1% $383 1.4%Sixth $30,811 <= $41,668 67,382 $2,377 $41.8 3.5% $620 1.8%Seventh $41,669 <= $55,471 67,385 $3,248 $77.2 6.5% $1,146 2.4%Eighth $55,472 <= $74,757 67,381 $4,350 $120.8 10.1% $1,792 2.8%Ninth $74,758 <= $108,724 67,383 $6,054 $222.6 18.6% $3,303 3.7%Tenth $108,724 <= $ Infinity 67,383 $14,440 $694.9 58.1% $10,312 4.8%Total Total 673,831 $35,561 $1,195.9 100.0% $1,775 3.4%Top Decile Decomposition90th to 95th $108,725 <= $145,201 33,693 $4,181 $178.3 14.9% $5,291 4.3%95th-99th $145,202 <= $323,241 26,952 $5,315 $254.8 21.3% $9,455 4.8%Top 1% $323,242 <= $ Infinity 6,738 $4,943 $261.8 21.9% $38,848 5.3%

Local Property Tax

Residential PropertyAnd Auto Excise Tax

Historical Growth of Property Tax Commitments

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Property Tax Year

Actuals

Maine Property Taxes Paid Directly by Homeowners - Tax Year 2009 (Maine Residents Only)

Income Tax Liability /1 Average Effective Decile Income Range Families $ Millions $ Millions Percent Tax Tax Rate

First & Second -$ Infinity <= $12,167 134,767 $859.3 $71.6 4.9% $532 8.3%Third $12,168 <= $17,711 67,387 $1,012.3 $55.7 3.8% $826 5.5%Fourth $17,712 <= $23,373 68,104 $1,392.0 $74.2 5.1% $1,089 5.3%Fifth $23,374 <= $30,810 66,659 $1,829.3 $93.5 6.5% $1,403 5.1%Sixth $30,811 <= $41,668 67,382 $2,376.6 $118.3 8.2% $1,755 5.0%Seventh $41,669 <= $55,471 67,385 $3,248.1 $158.3 10.9% $2,349 4.9%Eighth $55,472 <= $74,757 67,381 $4,349.6 $191.4 13.2% $2,841 4.4%Ninth $74,758 <= $108,724 67,383 $6,054.5 $246.6 17.0% $3,659 4.1%Tenth $108,724 <= $ Infinity 67,383 $14,439.7 $439.9 30.4% $6,529 3.0%Total Total 673,831 $35,561.3 $1,449.5 100.0% $2,151 4.1%Top Decile Decomposition90th to 95th $108,725 <= $145,201 33,693 $4,181 $184.4 12.7% $5,472 4.4%95th-99th $145,202 <= $323,241 26,952 $5,315 $187.7 12.9% $6,963 3.5%Top 1% $323,242 <= $ Infinity 6,738 $4,943 $67.9 4.7% $10,073 1.4%

Property Taxes Paid by Maine Residents on Their Primary Residence - Property Tax Year 2009

Average Total Property Average Ratio ofExpanded Taxes Paid /1 Property Average Tax to

Decile Expanded Income Homeowners Income (Millions) Tax Average Income

First & Second -$ Infinity <= $12,167 28,136 $6,559 $56.4 $2,006 30.6%Third $12,168 <= $17,711 22,600 $15,156 $43.7 $1,934 12.8%Fourth $17,712 <= $23,373 27,795 $20,648 $58.3 $2,096 10.2%Fifth $23,374 <= $30,810 32,412 $27,354 $71.1 $2,195 8.0%Sixth $30,811 <= $41,668 38,976 $35,610 $92.1 $2,363 6.6%Seventh $41,669 <= $55,471 47,372 $48,462 $122.8 $2,592 5.3%Eighth $55,472 <= $74,757 55,353 $64,673 $155.3 $2,806 4.3%Ninth $74,758 <= $108,724 59,871 $90,014 $201.0 $3,357 3.7%Tenth $108,724 <= $ Infinity 61,384 $214,497 $322.8 $5,258 2.5%Total 373,898 $74,370 $1,123.5 $3,005 4.0%Top Decile Decomposition90th to 95th $108,725 <= $145,201 30,616 $124,250 $131.7 $4,303 3.5%95th-99th $145,202 <= $323,241 24,826 $197,425 $141.4 $5,697 2.9%Top 1% $323,242 <= $ Infinity 5,942 $750,786 $49.6 $8,347 1.1%

Source: State of Maine Property Tax and Individual Income Tax Models

1/ Property tax paid is net of Homestead Exemption.

Maine Effective Tax Rates by Expanded Income Level All Resident Taxpayers (2009)

Tax Income Tax Consumer Total State TaxesDecile Expanded Income Range Families Individual Corporate Sales Tax Excise Tax Individual Business Total

First & Second -$ Infinity <= $12,167 134,767 0.09% 1.70% 3.67% 3.53% 7.28% 1.70% 8.98%Third $12,168 <= $17,711 67,387 0.33% 1.15% 2.08% 1.91% 4.32% 1.15% 5.48%Fourth $17,712 <= $23,373 68,104 0.66% 1.08% 2.05% 1.72% 4.43% 1.08% 5.50%Fifth $23,374 <= $30,810 66,659 1.39% 1.11% 2.31% 1.78% 5.48% 1.11% 6.59%Sixth $30,811 <= $41,668 67,382 1.76% 1.06% 2.07% 1.38% 5.20% 1.06% 6.27%Seventh $41,669 <= $55,471 67,385 2.38% 1.05% 1.91% 1.05% 5.34% 1.05% 6.39%Eighth $55,472 <= $74,757 67,381 2.78% 1.00% 1.66% 0.65% 5.09% 1.00% 6.09%Ninth $74,758 <= $108,724 67,383 3.68% 0.93% 1.34% 0.33% 5.36% 0.93% 6.29%Tenth $108,724 <= $ Infinity 67,383 4.81% 0.88% 1.33% 0.32% 6.63% 0.88% 7.51%Total 673,831 3.36% 0.98% 1.63% 0.75% 5.82% 0.98% 6.79%

90-95 $108,725 <= $145,201 33,693 4.26% 0.93% 1.35% 0.33% 5.98% 0.93% 6.91%95-99 $145,202 <= $323,241 26,952 4.79% 0.89% 1.35% 0.33% 6.59% 0.89% 7.48%Top 1% $323,242 <= $ Infinity 6,738 5.30% 0.82% 1.29% 0.31% 7.21% 0.82% 8.03%

Local Property Taxes Property Tax Relief Programs Total State and Local Taxes FederalDecile Individual Business Total Homestead Circ. Break BETR Individual Business Total Tax Offset

First & Second 8.34% 1.34% 9.68% -0.48% -0.95% -0.16% 14.18% 2.88% 17.06% -0.01%Third 5.50% 0.93% 6.43% -0.34% -0.60% -0.11% 8.88% 1.98% 10.86% -0.03%Fourth 5.33% 0.86% 6.18% -0.31% -0.46% -0.10% 8.98% 1.83% 10.82% -0.06%Fifth 5.11% 0.87% 5.99% -0.27% -0.34% -0.10% 9.99% 1.88% 11.87% -0.11%Sixth 4.98% 0.83% 5.81% -0.25% -0.25% -0.10% 9.69% 1.80% 11.48% -0.19%Seventh 4.87% 0.85% 5.72% -0.22% -0.15% -0.10% 9.84% 1.80% 11.64% -0.37%Eighth 4.40% 0.82% 5.22% -0.19% -0.08% -0.10% 9.22% 1.72% 10.94% -0.56%Ninth 4.07% 0.78% 4.85% -0.15% -0.03% -0.09% 9.26% 1.61% 10.87% -0.89%Tenth 3.05% 0.90% 3.94% -0.06% 0.00% -0.09% 9.61% 1.68% 11.29% -1.56%Total 4.08% 0.87% 4.94% -0.16% -0.12% -0.09% 9.61% 1.76% 11.37% -0.91%

90-95 4.41% 0.79% 5.19% -0.11% 0.00% -0.09% 10.28% 1.62% 11.90% -1.57%95-99 3.53% 1.19% 4.72% -0.07% 0.00% -0.09% 10.05% 1.99% 12.04% -1.51%Top 1% 1.37% 0.68% 2.05% -0.02% 0.00% -0.08% 8.57% 1.42% 9.99% -1.61%

Tax Category 2009

Individual Income Tax 0.240Consumer Sales Tax -0.126Consumer Excise Tax -0.412Estate Tax 0.570Total State Taxes 0.040

Residential Property Taxes Gross of State Programs -0.113 Net of State Programs -0.090

Total State and Local Taxes -0.013

Suits Index

Tax Foundation State & Local Tax Burden for MaineTotal Tax Home Tax

Fiscal Year Burden Rank Burden Rank MRS*1977 10.1% 23 7.0% 211978 10.5% 12 7.4% 121979 9.9% 14 7.0% 151980 9.8% 13 7.0% 141981 9.7% 9 6.9% 101982 9.9% 9 7.1% 111983 10.0% 11 7.1% 121984 10.3% 11 7.4% 101985 10.2% 12 7.3% 111986 10.3% 7 7.3% 91987 10.6% 7 7.7% 71988 10.9% 3 8.0% 51989 10.6% 5 7.8% 51990 10.5% 6 7.7% 71991 10.5% 8 7.7% 91992 11.0% 8 8.2% 51993 11.1% 7 8.3% 51994 10.9% 9 8.1% 51995 10.8% 7 8.1% 71996 10.7% 6 8.1% 7 11.8%1997 10.8% 6 8.2% 4 11.7%1998 11.2% 4 8.7% 3 11.5%1999 10.7% 6 8.3% 3 11.2%2000 10.6% 6 8.1% 5 11.0%2001 10.7% 4 8.2% 3 11.2%2002 10.8% 3 8.4% 2 11.5%2003 10.9% 5 8.4% 3 11.7%2004 10.7% 6 8.2% 3 11.8%2005 10.1% 11 7.4% 12 11.3%2006 10.7% 6 7.9% 5 11.2%2007 10.3% 9 7.5% 7 11.3%2008 10.6% 8 7.8% 7 11.4%2009 10.1% 9 7.6% 7 11.4%

* MRS estimates are on a calendar year basis.

Maine State & Local Effective Tax Rates 1996-2013

7.29% 7.33% 7.32% 7.22% 7.10% 6.86% 6.95% 7.04% 7.13% 6.99% 6.97% 6.87% 6.72% 6.51% 6.57% 6.47% 6.37% 6.06%

4.55% 4.39% 4.13% 4.00% 3.90%4.31% 4.54% 4.62% 4.64% 4.29%4.27% 4.39% 4.65% 4.86% 4.87% 4.90% 4.94% 4.96%

11.76%11.66%11.49%11.17%11.00%11.22%11.45%11.72%11.84%

11.28%11.24% 11.26% 11.37% 11.37% 11.44% 11.37% 11.31%11.02%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009P

2010F

2011F

2012F

2013F

Calendar Year

Effe

ctiv

e Ta

x R

ate State

Local

Total

Table 3 State and Local Tax Collections for CY13 Liability by Type of Tax and Taxpayer Category

(Millions of Dollars)

Collections Percentage by Taxpayer Category Tax Category Percentage Individuals

Total Distribution Resident Nonresident Businesses Total

Taxes on Income Individual Income Tax $1,366.9 24.1% 93.8% 6.2% 0.0% 100.0% Corporate Income Tax /1 $213.5 3.8% 0.0% 0.0% 100.0% 100.0%

Total Income Taxes $1,580.4 27.9% 81.1% 5.3% 13.5% 100.0%

Taxes on Consumption Sales & Use Tax $1,083.2 19.1% 59.7% 12.9% 27.4% 100.0% Cig., Tob. & Alcohol Excise $157.6 2.8% 91.5% 7.9% 0.6% 100.0% Insurance Companies Tax /2 $82.5 1.5% 0.0% 0.0% 100.0% 100.0% Motor Fuels Excise Taxes $246.5 4.3% 51.8% 8.6% 39.6% 100.0%

Total Consumption Taxes $1,569.9 27.7% 58.5% 11.0% 30.5% 100.0%

Taxes on Wealth Estate Tax $21.3 0.4% 80.0% 20.0% 0.0% 100.0%

Taxes on Property Local Homeowners (gross) $1,772.0 31.2% 86.1% 13.9% 0.0% 100.0% Businesses (gross) $637.3 11.2% 0.0% 0.0% 100.0% 100.0% Motor Vehicle Excise Tax $230.3 4.1% 70.0% 0.0% 30.0% 100.0% Watercraft Excise Tax $2.5 0.0% 80.0% 20.0% 0.0% 100.0% Homestead Exemption ($47.7) -0.8% 100.0% 0.0% 0.0% 100.0% Circuit Breaker Refunds ($58.3) -1.0% 100.0% 0.0% 0.0% 100.0% BETR/BETE Refunds ($77.7) -1.4% 0.0% 0.0% 100.0% 100.0%

State State Property Taxes (gross) /3 $28.8 0.5% 38.4% 8.0% 53.5% 100.0% Public Utilities Tax $13.5 0.2% 0.0% 0.0% 100.0% 100.0%

Total Property Taxes $2,500.8 44.1% 63.8% 9.9% 26.3% 100.0%

Total Taxes $5,672.5 100.0% 67.2% 9.0% 23.8% 100.0%

1/ Includes Franchise Tax on Financial Institutions.2/ Includes Fire Investigation and Prevention Tax.3/ Includes Unorganized Territory Taxes, Real Estate Transfer Taxes, and Commercial Forestry Excise Tax.

Percentage Distribution of Major Tax Categories 1996-2013

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

Year

Perc

ent o

f Tot

al

IncomeConsumptionProperty

Income 24.4 26.4 28.6 31.0 31.1 28.3 27.4 27.7 28.5 30.3 30.4 31.6 29.4 28.3 28.6 28.6 28.2 27.9Consumption 35.2 34.1 33.5 30.4 30.7 30.1 30.3 30.2 29.9 29.2 29.7 28.9 29.1 28.4 28.1 27.6 27.6 27.7Property 39.5 38.8 37.0 37.5 37.6 40.9 41.5 41.3 40.7 39.0 39.1 38.8 41.0 42.7 42.7 43.1 43.4 44.1

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

-0.013Total State and Local Taxes

-0.093Net of State Programs

-0.115Gross of State Programs

Residential Property Taxes

0.047Total State Taxes

0.575Estate Tax

-0.387Consumer Excise Tax

-0.107Consumer Sales Tax

0.240Individual Income Tax

2013Tax Category